Asian markets rose on Monday as fears about a potentially catastrophic China-US trade war were tempered by hopes the two sides will be able to hammer out an agreement.
US markets plunged on Friday after Donald Trump warned of tariffs on an additional $100 billion worth of Chinese imports, to which Beijing responded by saying it would stand firm.
The president’s announcement came weeks after his decision to tax imports of steel and aluminium, followed by planned levies on $50 billion worth of goods from China over what Washington says is theft of intellectual property and technology.
China retaliated by unveiling planned levies on $50 billion worth of major US exports. Trump’s moves, part of his protectionist “America First” agenda, have rattled world markets, fearing a trade war between the world’s top two economies could reverse the tentative global recovery.
“Much ink has been spilt over trade wars in the last few days, and we now wait to see what the Trump administration does next,” Stephen Innes, head of forex trading for Asia Pacific at OANDA, said in a note.
There are hopes Trump’s headline-grabbing tariffs are part of a plan to take a harsh line as a bargaining tactic towards a deal with China.
And on Sunday Trump tweeted that he saw an end to the dispute, saying: “China will take down its trade barriers because it is the right thing to do.” However top advisor Larry Kudlow, who has often suggested the tariffs might not go into effect, warned Friday the announcements were not negotiating tactics, while Treasury Secretary Steven Mnuchin said the White House hoped to negotiate but acknowledged a trade war was a possibility.
All three main indexes on Wall Street ended more than two percent down Friday.—AFP